The influence of price and brand loyalty on store brands versus national brands

Abstract

This article investigates how price and brand loyalty of three frequently purchased product categories can influence the purchase decision process of store brands versus national brands. A multinomial logit model was constructed to analyse the data obtained from a consumer panel. The results confirmed that brand loyalty is the main variable which influences the purchase decision process of both national and store brands. The influence of price on the purchase decision process is product specific. There is a clear distinction between the buyer's profile of store brands and national brands. But there is no evidence of any correlation between demographic variables and national brands or store brands.     

Blinded by Growth

Everybody loves a growth story. But that does not make growth by itself a good investment thesis. Fast‐growing countries and their companies often produce low returns for investors, and slow‐growing ones sometimes produce high returns. In exploring this apparent paradox, this article argues that valuation plays a critical role. It matters not only how fast a country or company may grow, but also how much investors pay for that growth. Blinded by growth, investors often pay too much to participate in the prospective growth of both countries and companies; and as result, they earn low returns. This tendency to overpay for growth helps explain what the author describes as indisputable evidence that, over the long term, value investing beats growth investing. This article discusses growth from three different points of view. First, it looks into the relationship between general economic growth and equity returns. Second, it examines the relationship between corporate growth and equity returns. And finally, it compares value investing with growth investing.     

Valuation in Emerging Markets: A Simulation Approach

Most of the foundations of valuation theory have been designed for use in developed markets. Because of the greater, and in some cases different, risks associated with emerging markets (although recent experience might suggest otherwise), investors and corporate managers are often uncomfortable using traditional methods. The typical way of capturing emerging-market risks is to increase the discount rate in the standard valuation model. But, as the authors argue, such adjustments have the effect of undermining some of the basic assumptions of the CAPM-based discounted cash flow model. The standard theory of capital budgeting suggests that estimates of unconditional expected cash flows should be discounted at CAPM discount rates (or betas) that reflect only “systematic,” or “nondiversifiable,” market-wide risks. In practice, however, analysts tend to take what are really estimates of “conditional” expected cash flows—that is, conditional on the firm or its country avoiding a crisis—and discount them at higher rates that reflect not only systematic risks, but diversifiable risks that typically involve a higher probability of crisis-driven costs of default. But there is almost no basis in theory for the size of the increases in discount rates. In this article, the authors propose that analysts in emerging markets avoid this discount rate problem by using simulation techniques to capture emerging-market risks in their estimates of unconditional expected cash flows—in other words, estimates that directly incorporate the possibility of an emerging-market crisis and its consequences. Having produced such estimates, analysts can then discount them using the standard Global CAPM.     

Forecasting Heavy‐Tailed Densities with Positive Edgeworth and Gram‐Charlier Expansions*

This article presents a new semi‐nonparametric (SNP) density function, named Positive Edgeworth‐Sargan (PES). We show that this distribution belongs to the family of (positive) Gram‐Charlier (GC) densities and thus it preserves all the good properties of this type of SNP distributions but with a much simpler structure. The in‐ and out‐of‐sample performance of the PES is compared with symmetric and skewed GC distributions and other widely used densities in economics and finance. The results confirm the PES as a good alternative to approximate financial returns distribution, specially when skewness is not severe.     

State-society relations and national development: a comparison of Argentina and Taiwan in the 1990s

Research on national development in developing and newly industrializing countries (NICs) has focused on issues of economic growth and social change independent of each other, without paying much attention to the way the two elements relate to each other and to the conditions that could lead to their simultaneous occurrence. This paper argues that explanations of how economic growth with — or without —‘positive social change’ can occur require attention to changing state-society relations. This research investigates the cases of Argentina and Taiwan, where economic growth in the 1990s has not translated into positive social change. By analyzing changing state-society relations, this research shows that relations of power within societies have a clear effect on national development; it also reveals how different social actors may be able to influence a state’s developmental strategies. This paper re-evaluates traditional views of the state and society in Argentina and Taiwan by examining the fluctuating composition of the societal base of the state and the changing relations between the state and its societal coalition. The analysis reveals the processes under which economic growth without social change is occurring in both countries, and provides general insights into the way dynamic state-society relations can influence national development in other contexts. — La recherche sur le développement national des pays en voie de développement et les pays nouvellement industrialisés a exploré les questions de croissance économique et de changement social séparément, sans s’occuper du rapport entre les deux et des conditions qui pourraiemt mener à leur occurrence simultanée. Cet article soutient qu’une explication de la croissance industrielle, avec ou sans ‘changements sociaux positifs’, demande que l’on prête attention aux relations changeantes entre l’état et la société. Cet article examine les cas d’étude de l’Argentine et de Taï?wan, où la croissance économique n’a pas apporté de changements sociaux positifs. En analysant les relations changeantes de l’état et de la société, cette étude démontre que les relations de pouvoir à l’intérieur des sociétés ont un effet manifeste sur le développement national; elle révèle aussi comment les différents participants sociaux peuvent influencer les stratégies de développement de l’état. Cet article ré-évalue les vues traditionnelles de l’état et de la société en Argentine et à Taïrsquo;?wan en examinant les compositions changeantes de la base sociale de l’état et les relations variables entre l’état et sa coalition sociale. L’analyse révèle les processus par lesquels la croissance économique survient sans changement social dans les deux pays et offre un aperçu général de la façon dont les relations dynamiques entre l’état et la société peuvent influencer le développement national dans d’autres contextes.     

Economic inequality in Spain: the european community household panel dataset

This article uses data from the 1998 European Community Household Panel to study economic inequality in Spain. It reports data on the Spanish distributions of income, labor income, and capital income, and on related features of inequality, such as age, employment status, educational attainment, and marital status. It also reports data on the income mobility of Spanish households, and data on income inequality in other European countries and in the US. We find that income, earnings, and, especially, capital income are very unequally distributed in Spain and that economic inequality in Spain is well above the European average.     

Validating a model for forecasting the project termination phase using existing business cases

Studies on project failure and its subsequent termination phase are scarce; studies that use a quantitative approach are almost nonexistent. This is most likely because organizations usually do not collect data on project failures, are unable to share such data, or a combination of both. The contribution of this article is twofold: to (1) showcase a methodology to validate a model using actual business cases and (2) validate a project termination phase forecast model (PTPFM) using the methodology. The model is validated through four business cases, comparing the results from the model to the decisions made in reality.     

On the contribution of eco-innovation features to a circular economy: A microlevel quantitative approach

The circular economy (CE) and eco-innovation (EI) are two concepts deemed instrumental in achieving a sustainable transition. They have been proposed in the academic literature and by practitioners and have acquired very high public policy relevance, being endorsed by policymakers and ultimately leading to regulations supporting them. It has been argued that both concepts are compatible and interrelated and that EI is instrumental in achieving the CE. However, little is known about how different EI features contribute to the CE at the microlevel. This article tries to cover this gap. Its aim is to assess and quantify the causal relationship between different EI features and the CE with the help of a unique dataset of small- and medium-sized firms in Spain and an econometric analysis. Our results show that only systemic EIs contribute to a global CE, whereas other EI types such as component additions or small changes in existing production processes could even be barriers to high levels of circularity. It is found out that technological novelty is not relevant for reaching the CE. The results support the understanding of how EIs enable a transition to the CE. Care should be taken not to promote incremental EIs that do not only achieve low (or no) circularity but that effectively lock-in the economic system in solutions that entail a barrier to the achievement of high-level circularity.     

Firm size and productivity from occupational choices

Small Business Economics - We model the distributions of firm sizes and of firms’ total factor productivity (TFP) as outcomes of a market equilibrium from the occupational decisions of...